Over the Legal Lending Limit?

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Question:

You have two borrowers, both are very close to reaching the legal lending limit, and one borrower buys out the other. Are you now in violation of going over the legal lending limit to one entity?

Answer:

No, but you could not extend any additional credit, or renew any loans until the new entity was back under the loans to one borrower limit.

First published on BankersOnline.com 3/20/06